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Nextcloud files are stored in conventional directory structures, accessible via WebDAV if necessary. User files are encrypted during transit and optionally at rest. Nextcloud can synchronise with local clients running Windows (Windows XP, Vista, 7 and 8), macOS (10.6 or later), or various Linux distributions.

Nextcloud permits user and group administration (via OpenID or LDAP). Content can be shared by defining granular read/write permissions between users and groups. Alternatively, Nextcloud users can create public URLs when sharing files. Logging of file-related actions, as well as disallowing access based on file access rules is also available.[3]

Since the software is modular, it can be extended with plugins to implement extra functionality. Developers can offer their extensions to other users for installation via a manufacturer-operated platform. This platform communicates with the Nextcloud instances via an open protocol. The App Store[5] already contains over 200 extensions. With the help of these extensions the following functionalities can be added:

In order for desktop machines to synchronize files with their Nextcloud server, desktop clients are available for PCs running Windows, macOS, FreeBSD or Linux. Mobile clients exist for iOS and Android devices. Files and other data (such as calendars, contacts or bookmarks) can also be accessed, managed, and uploaded using a web browser without any additional software. Any updates to the file system are pushed to all computers and mobile devices connected to a user's account.

With Nextcloud 12, a new architecture was developed with the name Global Scale, with the goal of scaling to hundreds of millions of users. It splits users over separate nodes and introduces components to manage the interaction between them.[8]

In September 2016, Nextcloud, in cooperation with Western Digital Labs and Canonical (the company behind Ubuntu), released the Nextcloud Box. The announcement was made by Jane Silber, CEO of Canonical and Frank Karlitschek[9]. The Nextcloud box was based on a Raspberry Pi, running Ubuntu Core with Snappy; it was intended to serve as a reference device for other vendors.[10] In June 2017, Western Digital shut down Western Digital Labs,[11] which caused the production of the box to end[12].

In April 2016 Karlitschek and most core contributors [14] left ownCloud Inc.[15] These included some of ownCloud's staff according to sources near to the ownCloud community.[16]

The fork was preceded by a blog post of Karlitschek, asking questions such as "Who owns the community? Who owns ownCloud itself? And what matters more, short term money or long term responsibility and growth?"[15] There have been no official statements about the reason for the fork. However, Karlitschek mentioned the fork several times in a talk at the 2018 FOSDEM conference, emphasizing cultural mismatch between open source developers and business oriented people not used to the open source community.[17]

On June 2, within 12 hours of the announcement of the fork, the American entity "ownCloud Inc." announced that it is shutting down with immediate effect, stating that "[…] main lenders in the US have cancelled our credit. Following American law, we are forced to close the doors of ownCloud, Inc. with immediate effect and terminate the contracts of 8 employees.". ownCloud Inc. accused Karlitschek of poaching developers, while Nextcloud developers such as Arthur Schiwon stated that he "decided to quit because not everything in the ownCloud Inc. company world evolved as I imagined".[18] ownCloud GmbH continued operations, secured financing from new investors and took over the business of the ownCloud Inc.[19]

While Nextcloud was originally a fork of the ownCloud project, there are now many differences. While ownCloud offers an open-source community edition, they also offer a proprietary Enterprise Edition with additional features and support subscriptions — Nextcloud instead uses the same public code base for both free and paid users.

Nextcloud's popularity also appears to have overtaken that of ownCloud, at least based on Google Trends data.[20]

Projects allows users to link different types of information together like chats, calendars, todos and files. Useful for collaboration of teams. Projects can be shared complete or in parts with colleagues[30]